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Debt Consolidation in Virginia

Are you a Virginia resident, with too many high interest loans? Are your creditors harassing you with constant collection calls and threatening letters? If that's the case, then it's high time that you seriously consider some debt management options and make your way out of your financial crisis. Debt consolidation could be the ideal solution.

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How Debt Consolidation Programs works in Virginia

Virginia Debt Consolidation offers you a solution to multiple debt problems, bad credit, and creditor harassment. All you need to do is take out a low interest loan to pay off your current creditors.

Consolidation loans can be divided into:

  • Secured loans:A secured loan requires that the borrower puts down an asset as collateral, such as a house or car. Using a secured loan carries a less of a risk for the lender, and therefore these loans carry lower interest rates and borrowers are allowed to take out more money than with an unsecured loan.
  • Unsecured loans:Unsecured loans do not involve any collateral provision, and usually carry higher interest rates.

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Home Equity Lines of Credit as consolidation loans

Home Equity lines of credit (HELOCs) are one of the best types of secured loans to use as consolidation loans. HELOCs are also called second mortgages. The following are some advantages of Home Equity Line of Credit:

  • APRs are generally not more than 9%
  • HELOCs offer revolving credit, which allows you to use the money at any time.
  • It allows you to spread repayment out over a long period.
  • HELOC loans usually have a low default rate.

It is always better to borrow against your home than to apply for new credit cards repeatedly for the lower introductory rates. Moreover, revolving credit ensures that you do not need to take out new loans every time your finances go a little tight!

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Enrolling in a debt consolidation program

If you are nervous about trying to find a consolidation loan on your own, seeking the debt consolidation services of a Better Business Bureau (BBB) accredited Debt Consolidation Company in Virginia is the solution.

When you enroll with a consolidation service, the company's lawyers thoroughly evaluate your situation. Then the company contacts your creditors and gets them to stop communicating with you. Next, they negotiate with the creditors regarding lowering interest rates and curtailment of late-fees and over-limit charges.

All you need to do is pay an upfront fee to start the consolidation process, and pay the company every month according to the consolidation plan. The consolidation company uses your payment to disburse the monthly installments to your individual creditors.

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Debts ideal for consolidation

The following are the debts which are ideal for debt consolidation.

  • Credit Cards Debts.
  • Student Loans.
  • Personal Loans.
  • Medical bills.
  • Payday Loans.
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Effects of Virginia Debt Consolidation on your Credit Score

In a Debt Consolidation program you take out a loan. This causes your credit score to temporarily decrease. As you pay off your debts with the loan, your score recovers, and leaves you only with a single loan to pay on.

And as you pay off the consolidation loan your credit score improves even more!

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Things you should keep in mind when in a consolidation program

There are several things you should do to keep your credit score from decreasing while in a debt consolidation program:

  • Do not close your credit card accounts as soon as you pay them off: Doing this hurts your credit score. Take care to keep your oldest accounts open.
  • Do not to take out any new loans, while on a consolidation program, as it will lower your credit score.
  • Make your payments on time, as timely payments always increase your credit score.
  • Avoid resorting to balance-transfers, especially if you apply for a new credit card in order to use the introductory interest rate. If you fail to pay off within the trial period, your interest rates will return to normal, increasing your debt burdens.
  • Do not apply for credit cards,while in a consolidation plan. Applying for a new credit every six months opens up possibilities for new defaults.

Handled properly, debt consolidation could pave the way to a vastly improved credit score in your future.

Related information

State Attorney General Phone Number: 304-558-8986; Toll Free: 1-800-368-8808
Public Service Commission Phone Number: (804) 371-9420

FTC Address:
East Central Region Federal Trade Commission 1111 Superior Avenue, Suite 200 Cleveland, OH 44114-2507
FTC Toll Free:
877-FTC-HELP (382-4357)
FTC Website Url:
CFPB Toll Free:
CFPB E-mail:
CFPB Website Url:

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